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Working Group III – Mitigation of Climate Change

Chapter 1

Introduction

Second Order Draft (SOD) IPCC WG III AR5

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1

Chapter: 1

Title: Introduction

(Sub)Section: All

Author(s): CLAs: David Victor, Dadi Zhou

LAs: Essam Hassan Mohamed Ahmed, Pradeep Kumar Dadhich, Jos Olivier, Hans-Holger Rogner, Kamel Sheikho, Mitsutsune Yamaguchi

CAs: Giovanni Baiocchi, Linda Wong

REs: Arnulf Grübler, Alik Muvundika

Chapter Science Assistant:

Songli Zhu

Remarks:

Version: 1

File name: WGIII_AR5_Draft2_Ch01.docx

Date: 20 February 2013 Template Version: 3

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Table of changes 3

No Date Version Place Description Editor

1 TT.MM.JJJJ 01 Outline

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Chapter 1: Introduction 1

Contents 2

Chapter 1: Introduction .......................................................................................................................... 2 3

Executive Summary ............................................................................................................................ 3 4

1.1 Introduction .................................................................................................................................. 5 5

1.2 Main messages and changes from previous assessment ............................................................. 5 6

1.2.1 Lessons learned since AR4 .................................................................................................... 5 7

1.2.1.1 Sustainable Development and other Goals ................................................................... 5 8

1.2.1.2 The World Macroeconomic Situation ............................................................................ 7 9

1.2.1.3 The Availability, Cost and Performance of Energy Systems .......................................... 9 10

1.2.1.4 International institutions and agreements .................................................................. 12 11

1.2.1.5 Understanding the roles of emissions other than fossil fuel CO2 ................................ 14 12

1.2.1.6 Emissions Trajectories and Implications for Article 2 .................................................. 15 13

1.2.2 New challenges for the AR5 ................................................................................................ 16 14

1.3 Historical, Current and Future Trends ........................................................................................ 17 15

1.3.1 Review of four decades of greenhouse gas emissions ........................................................ 17 16

1.3.2 Perspectives on Mitigation .................................................................................................. 24 17

1.3.3 Scale of the Future Mitigation Challenge ............................................................................ 28 18

1.4 Mitigation Challenges and Strategies ......................................................................................... 31 19

1.4.1 Reconciling priorities and achieving sustainable development .......................................... 31 20

1.4.2 Uncertainty and Risk Management ..................................................................................... 32 21

1.4.3 Encouraging international collective action ........................................................................ 33 22

1.4.4 Promoting Investment and Technological Change ............................................................. 33 23

1.4.5 Rising Attention to Adaptation............................................................................................ 34 24

1.5 Roadmap for WG III report ......................................................................................................... 35 25

References ........................................................................................................................................ 37 26

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Executive Summary 1

Since the first IPCC assessment report (IPCC, 1990), the quantity and depth of scientific research on 2 climate change mitigation has grown enormously. In tandem with scholarship on this issue, the last 3 two decades have seen relatively active efforts around the world to design and adopt policies that 4 control (“mitigate”) the emissions of pollutants that affect the climate. Those policies have been 5 local, national and international in scope. They have included market-based approaches such as 6 emission trading systems along with regulation and voluntary initiatives; they encompass many 7 diverse economic development strategies that countries have adopted with the goal of promoting 8 human welfare and jobs while also achieving other goals such as mitigating emissions of climate 9 pollutants. International diplomacy—leading to agreements such as the United Nations Framework 10 Convention on Climate Change (UNFCCC) and the Kyoto Protocol—has played a substantial role in 11 focusing attention on mitigation of GHGs. 12

The field of scientific research in this area has evolved in parallel with actual policy experience 13 allowing, in theory, insights from each domain to inform the other. Since the 4th assessment report 14 (AR4) of IPCC (2007a) (2007b) there have been numerous important developments in both the 15 science and practical policy experience related to mitigation. There is growing insight into how 16 climate change mitigation policies interact with other important social goals from the local to the 17 national and international levels. There is also growing practical experience and scholarly research 18 concerning a wide array of policy instruments. Scholars have developed much more sophisticated 19 information on how public opinion influences the design and stringency of climate change mitigation 20 policies. 21

Meanwhile, events in the world have had a large impact on how scientific researchers have seen the 22 scale of the mitigation challenge and its practical diplomatic outcomes. A worldwide economic 23 recession beginning around 2008 has affected patterns of emissions and investment in the world 24 economy and in many countries has affected political priorities on matters related to climate change 25 mitigation. 26

The present chapter identifies six conclusions. First, efforts at mitigation must begin with 27 assessments of the trends in total emissions of greenhouse gases (GHGs) as well as the factors that 28 affect those emissions. Since AR4, global GHG emissions have continued to grow and reached an all 29 time high of 50.1 billion tonnes (gigatonnes or Gt) of carbon dioxide equivalents (CO2-eq). On a per-30 capita basis, emissions from industrialized countries that are listed in Annex I of the UNFCCC are on 31 average nearly 4 times higher than those from developing countries. However, since AR4 total 32 emissions from countries not listed in Annex I have overtaken total emissions from the Annex I 33 industrialized countries. Treating the 27 members of the EU as a single country, about ten large 34 countries—from the industrialized and developing worlds—account for 70% of world emissions. 35 [1.3; high agreement, robust evidence] The driving forces for emissions include population, income, 36 the structure of the economy, individual and societal behaviour, patterns of consumption, 37 investment decisions, the state of technology, availability of energy resources, and induced effects, 38 e.g. anthropogenic land use conversion, forest, peat and other land emissions in changing climatic 39 conditions. These factors affect the choice of fuels as well as the overall efficiency of the energy 40 system. In nearly all countries it is very likely that the main short-term driver of changes in the level 41 of emissions is the overall state of the economy. It is likely that there is a large role for climate 42 policies focused on controlling emissions. [1.3; high agreement, robust evidence] 43

Second, national governments are addressing climate change in the context of other national 44 priorities, such as energy security and alleviation of poverty. Thus it is very likely that actual progress 45 in controlling emissions is larger than it may seem when analysts focus just on policies that 46 governments have identified as “climate change-related.” In nearly all countries the most important 47 driving forces for climate policy are not solely the concern about climate change. [1.2 and 1.4; 48 medium agreement, medium evidence]. Studies on policy implementation show that improvements 49



to climate mitigation and adaptation programs as well as other possible responses such as 1 geoengineering—for example through capacity-building—need to engage these broader national 2 priorities. Despite the variety of existing policy efforts and the existence of the UNFCCC and the 3 Kyoto Protocol, GHG emissions have grown at about twice the rate in the recent decade (2000-2010) 4 than any other decade since 1970. [1.3.1; high agreement, robust evidence] 5

Third, it is virtually certain that the current trajectory of global annual and cumulative emissions of 6 GHGs is inconsistent with widely discussed goals of limiting global warming at 1.5 to 2 degrees 7 Celsius above the pre-industrial level. [1.2.1.6 and 1.3.3; medium agreement, robust evidence] 8 Existing models suggest it is very unlikely that the goal of stabilizing warming at 2 degrees at least 9 cost is practically feasible unless international cooperation that involves all countries were to begin 10 almost immediately and a wide array of cost-effective low emission technologies were available. It is 11 exceptionally unlikely that meeting the more aggressive goal of stabilizing warming at 1.5 degrees 12 Celsius is feasible [1.3.3; high agreement, robust evidence] 13

Fourth, it is likely that deep cuts in emissions will require a diverse portfolio of policies and 14 technologies as well as human behaviour. It is very likely that there are many different development 15 trajectories capable of substantially mitigating emissions, and it is virtually certain that the ability to 16 meet those trajectories will be constrained if particular technologies are removed from 17 consideration. It is virtually certain that the most appropriate policies will vary by sector and country, 18 suggesting the need for flexibility rather than a singular set of policy tools. In most countries the 19 actors that are relevant to controlling emissions aren’t just national governments. Many diverse 20 actors participate in climate policy from the local to the global levels—including a wide array of 21 nongovernmental organizations representing different environmental, social, business and other 22 interests. [1.4; medium agreement, robust evidence] 23

Fifth, policies to mitigate emissions are extremely complex and arise in the context of many different 24 forms of uncertainty. While there has been much public attention to uncertainties in the underlying 25 science of climate change—a topic addressed in detail in IPCC’s Working Group 1 and 2 reports—it is 26 virtually certain that profound uncertainties arise in the socioeconomic factors addressed here in 27 Working Group 3. Those uncertainties concern the development and deployment of technologies, 28 average rates of economic growth and the distribution of benefits and costs within societies, 29 emission patterns, and a wide array of institutional factors such as whether and how countries 30 cooperate effectively at the international level. For the most part, these uncertainties and 31 complexities multiply those already identified in climate science by Working Groups 1 and 2. The 32 pervasive complexities and uncertainties suggest it is very likely that there is a need to emphasize 33 policy strategies that are robust over many criteria, adaptive to new information, and able to 34 respond to unexpected events. [1.2; medium agreement, medium evidence] 35

Sixth, scholars have developed more sophisticated techniques for assessing risks. They have also 36 focused research on risk management strategies, drawing attention to the interactions between 37 mitigation and other kinds of policy responses such as adaptation to climate change and possible 38 deployment of geoengineering technologies as a last resort in case the dangers of extreme climate 39 change appear quickly [chapter 2; low agreement, medium evidence]. In that context it is very likely 40 that adaptation to climate change should be viewed as a complement to mitigation policies, not a 41 substitute [1.4; high agreement, limited evidence]. There is rising scholarly attention to the role of 42 adaptation in light of the GHGs already loaded into the atmosphere and virtually certain to be 43 emitted in the future. 44

45



1.1 Introduction 1

Working Group 3 of the IPCC is charged with assessing scientific research related to the mitigation of 2 climate change. “Mitigation” is the effort to control the fundamental human sources of climate 3 change and their cumulative impacts, notably the emission of pollutants that can affect the planet’s 4 energy balance, and to enhance GHG sinks. Because mitigation lowers the likely effects of climate 5 change as well as the risks of extreme impacts, it is part of a broader policy strategy that includes 6 adaptation to climate impacts—a topic addressed in more detail in IPCC’s Working Group 2. There is 7 a special role for international cooperation on mitigation policies because most climate pollutants 8 have long atmospheric lifetimes and mix throughout the global atmosphere. The effects of 9 mitigation policies on economic growth, innovation and spread of technologies and other important 10 social goals are also matters of international concern because nations are increasingly inter-linked 11 through global trade and economic competition. 12

This chapter introduces the major issues that arise in mitigation policy and also frames the rest of 13 the Working Group III volume. First we focus on the main messages since the publication of AR4 in 14 2007 (section 1.2). Then we look at the historical and future trends in emissions and driving forces, 15 noting that the scale of the mitigation challenge has grown enormously since 2007, raising questions 16 about the viability of widely-discussed goals such as limiting climate warming to 2 degrees Celsius 17 since the pre-industrial period (section 1.3). Then we look at the conceptual issues—such as 18 sustainable development, green growth, and risk management—that frame the mitigation challenge 19 and how those concepts are used in practice (section 1.4). Finally, we offer a roadmap for the rest of 20 the volume (section 1.5). 21

1.2 Main messages and changes from previous assessment 22

Since AR4 there have been many developments in the world economy, emissions and policies 23 related to climate change. Here we review what has changed because that helps to define the 24 challenges and opportunities that arise for the current report. 25

1.2.1 Lessons learned since AR4 26

Since AR4 there have been changes, broadly, in two areas. First, there have been large changes in 27 the economic and political context within which governments and various actors have tried to 28 address the climate issue. Second, there have been changes in the scientific assessment of climate 29 change mitigation and adaptation. Those broad changes have been reflected, in particular, in six 30 major ways. 31

FAQ 1.1. What exactly is climate change mitigation? 32

The Framework Convention on Climate Change (UNFCCC), in its Article 1, defines climate change as: 33 ‘a change of climate which is attributed directly or indirectly to human activity that alters the 34 composition of the global atmosphere and which is in addition to natural climate variability observed 35 over comparable time periods’. 36

Climate Change Mitigation is an activity with the purpose to reduce emissions of greenhouse gases 37 (GHG) in the atmosphere at levels lower than would otherwise occur. The ultimate goal of mitigation 38 (per Article 2 of the UNFCCC) is preventing dangerous anthropogenic interference with the climate 39 system. 40

1.2.1.1 Sustainable Development and other Goals 41

Addressing climate change has become one element in an effort to broaden the concept of 42 economic growth. Often called “sustainable development,” “green growth,” “green economy,” or 43



other terms, these varied new approaches aim to harmonize economic growth with other goals such 1 as environmental protection and justice (World Commission on Environment and Development, 2 1987; UNDP, 2009; ADB et al., 2012; BRICS, 2012; OECD, 2012; United Nations, 2012) Over the last 3 two decades, climate change has become a key (but not sole) environmental challenge of 4 sustainable development (see chapter 4). In many respects, these concepts are not new as they 5 reflect the effort in the social sciences over the last century to develop techniques for measuring and 6 responding to the many positive and negative externalities that arise as economies evolve—7 concepts discussed in more detail in chapter 3 of this volume. 8

All countries in varied ways have made great efforts on sustainable development and addressing 9 climate change. Their efforts cover all major mitigation measures, such as energy conservation and 10 efficiency improvement, development of low carbon energy sources, protecting and increasing 11 forests and other carbon sinks, and reducing greenhouse gases emission from particular sectors such 12 as industry and transport. For example, China has declared many policy strategies that centrally 13 advance green and low carbon development. It has set a national energy efficiency target of 14 decreasing energy intensity (emissions per unit of GDP) of 20% between 2006-2010. (The actual 15 achievement was 19.1 %.) A new target (16% reduction in energy intensity from 2011 to 2015) is 16 now in force, along with the goal of reducing carbon intensity by 17% over the same time (Hu and 17 Rodriguez Monroy, 2012; Paltsev et al., 2012). The practical effects of these policy goals are evident 18 in many places. For example, by the end of 2011, wind power installed capacity in China reached 65 19 GW, ranking the first in the world; the country has doubled its hydro-power capacity during 2006-20 2010; and more nuclear reactors are being planned and under construction than in the rest of the 21 world combined (Xie, 2009; Guo, 2011; Ye, 2011). 22

Many other countries are also playing leading roles in developing and deploying new energy 23 technologies—driven by sustainable development strategies that emphasize the interconnection of 24 many different policy goals such as energy and food security, local pollution control and climate 25 change. For example, the Government of India launched the Jawaharlal Nehru National Solar 26 Mission (JNNSM) to encourage the needed regulatory frameworks, human resource capacity and 27 investment in solar energy technologies with the goal of making solar power competitive with 28 conventional grid power by 2022. India has added more than a Gigawatt of solar capacity in less than 29 three years since the launch of the mission (Government of India, 2009). 30

Just as many developing countries have taken steps, many industrialized countries have also 31 adopted important policies. The European Union has implemented an Emission Trading Scheme 32 (ETS) which covers about half of the EU’s emissions, along with an array of regulations in other 33 sectors (e.g., buildings) where emissions are not included in the ETS. Since AR4 the EU has expanded 34 the ETS to cover aviation. The U.S. has adopted new regulatory standards on fuel economy and 35 other types of end-use efficiency as well as labeling programs; many U.S. states have also adopted 36 their own state regulations to advance complementary goals. The governments of Australia and 37 Japan have adopted carbon tax, as has the Canadian province of British Columbia—and all of these 38 governments have devoted at least a portion of the tax revenues to activities that will mitigate 39 emissions. 40

Some countries also made significant progress in protecting and improving carbon sinks. Brazil 41 launched the program for preventing and controlling the deforestation and forest fires in the 42 Amazon area, with advanced remote sensing and meteorological satellite technologies, combined 43 with administrative, economic and legal instruments. As a result, the CO2 emissions related to land 44 use and forestry in Brazil have decreased to 1.26 billion tons of CO2 in 2005 from the highest 1.84 45 billion tons of CO2 in 1995 (FRB, 2010). It remains difficult, however, to disentangle the role of 46 policies from other factors that affect incentives for deforestation (Assunção et al., 2012). 47

While there are many areas of tangible progress from countries integrating the many goals that lead 48 to sustainable development there are also many challenges. Per capita energy consumption and 49



emissions of some developing countries is still far lower than that of developed countries, suggesting 1 that as economies converge that emissions will rise (Olivier et al., 2012). Current investment in low 2 carbon technologies is insufficient to offset the emissions increases associated with projected 3 economic growth in both developed and developing countries. In the face of other development 4 needs, high upfront investment costs of may low carbon technologies pose a challenge to developing 5 countries. . 6

Overall, the evidence suggests that while efforts to define and implement “sustainable development,” 7 “green growth” and other efforts to organize economies around multiple social goals that include 8 management of environmental externalities have led to a diverse array of climate change mitigation 9 policies, the totality of the global effort remains inconsistent with widely discussed goals for 10 protecting the climate. 11

FAQ 1.2. What causes GHG emissions? 12

Anthropogenic GHGs come from combustion of fossil fuels in energy conversion systems like boilers 13 in electric power plants, engines in aircraft and automobiles, and in cooking and heating within 14 homes and businesses. While most GHGs come from fossil fuel conversion, a substantial part also 15 comes from other activities like agriculture, deforestation, industrial processes and municipal waste. 16

1.2.1.2 The World Macroeconomic Situation 17

Shortly after the publication of AR4 in 2007, the world encountered a severe and deep financial crisis 18 (Sornette and Woodard, 2009). The crisis which spread rapidly in the fall of 2008 destabilized many 19 of the largest financial institutions in the US, Europe and Japan, and shocked public confidence in the 20 global financial system and wiped out an estimated $25 trillion in value from the world’s publicly 21 traded companies, with particularly severe effects on banks (IMF, 2009; Naudé, 2009). The effects of 22 the crisis are evident in economic growth—shown on Figure 1.1. The year 2009 witnessed the first 23 contraction in global GDP since the Second World War (Garrett, 2010). International trade of goods 24 and services had grown rapidly since the turn of the millennium - from 18% of world GDP in 2000 to 25 28% in 2008 (WTO, 2011). The crises caused global trade to drop to 22% in 2009 before rebounding 26 to 25% in 2010. 27

The effects of the recent economic crisis have been concentrated in the advanced industrialized 28 countries that have remained somewhat decoupled from the rest of the global economy (Te Velde, 29 2008; Lin, 2008; ADB, 2009, 2010) While this particular crisis has been large, studies have shown that 30 these events often recur, suggesting that there is pervasive over-confidence that policy and 31 investment strategies can eliminate such cyclic behaviour (Reinhart and Rogoff, 2011). 32

Although Figure 1.1 reveals that developing countries were generally not directly affected by the 33 melt-down of financial institutions in the industrialized world the contagion of recessions centred on 34 the OECD has spread, especially to countries with small, open and export-oriented economies. The 35 crisis has also affected foreign direct investment (FDI) and official development assistance (ODA) 36 (IMF, 2009, 2011). 37



1

Figure 1.1. Annual real growth rates of real GDP by decade (left panel) and since 2000 (right panel) 2 for large developing countries that are members of the G20 (DC-G20), large industrialized countries 3 that are G20 members (IC-G20), other countries that are not G20 members and the least developed 4 countries (LDC) as defined by the UN. Estimates weighted by economic size and variations to one 5 standard deviation shown. Growth rates averaged by decade and weighted by size of the economy; 6 also shown the variation to one standard deviation. Sources: Real (PPP converted) growth rates from 7 World Bank, with coverage gaps filled with IMF, Penn World Tables and IEA-OECD. 8

The continued growth of developing economies, albeit at a slower pace than before the crisis, helps 9 to explain why global commodity prices, such as for oil, have quickly rebounded as well (see Figure 10 1.2). Among the many implications of high and volatile commodity prices are continued concerns 11 about the availability and security of energy and food supply, especially in the least-developed 12 countries. Those concerns have also reshaped, to some degree, how problems such as global climate 13 change are viewed in many countries and societies. Where climate change mitigation has linked to 14 these broader economic and energy security concerns it has proven politically easier to mobilize 15 action; where they are seen in conflict the economic and security priorities have often dominated 16 (Chandler et al. 2002; IEA 2007; ADB 2009). 17

18 19 Figure 1.2. Price indices of selected commodities. Source: (Index Mundi, 2011). [Author Note: this is 20 a placeholder for a figure that will show price indices of oil, [metal/steel/ore], concrete, ethanol, coal, 21 and food [composite/corn?] since 1970 (main figure) and since 2000 (inset). [Author note to 22 reviewers: this figure to be redrawn and simplified in parallel with SOD.] 23



The implications of these macroeconomic patterns are many, but at least five are germane to the 1 challenges of climate change mitigation: 2

First, the momentum in global economic growth has shifted to the emerging economies—a 3 pattern that was already evident in the 2000s before the crisis hit. Although accelerated by the 4 recent financial crisis, this shift in production, investment and technology to emerging 5 economies is a phenomenon that is consistent with the expectation that in a globalized world 6 economy capital resources will shift to emerging economies where they can be used with 7 greatest marginal productivity (Zhu, 2011; Lamy, 2011). With that shift has been a consequent 8 shift in the growth of greenhouse gas emissions. 9

Second, much of this shift has arisen in the context of globalization in investment and trade, 10 leading to higher emissions that are ‘embedded” in traded goods and services, suggesting the 11 need for additional or complementary accounting systems that reflect the ultimate consumption 12 of manufacturing goods that cause emissions rather than just the geographical place where 13 emissions occurred during manufacturing (Houser et al. 2008; Davis and Caldeira 2010; Peters, 14 Davis, and Andrew 2012; Peters et al. 2011). 15

Third, economic troubles affect political priorities. As a general rule, hard economic times tend 16 to focus public opinion on policies that yield immediate economic benefits that are realized close 17 to home (Kahler and Lake, 2013). Long-term goals, such as global climate protection, suffer 18 unless they are framed to resonate with these other, immediate goals. Chapter 2 of this volume 19 looks in more detail at the wider array of factors that affect how humans perceive and manage 20 risks that are spread out over long time horizons. 21

Fourth, economic slowdown may also reduce the rate of technological progress that contributes 22 to addressing climate change, such as in energy efficiency (Bowen et al., 2009). The crisis also 23 has accelerated shifts in the global landscape for innovation (Gnamus, 2009). The largest 24 emerging economies have all built effective systems for innovation and deployment of new 25 technologies—including low emission technologies. This “technology transfer” now includes 26 “South-South” exchanges of technology although a central role remains for “North-South” 27 technology transfer as part of international agreements on climate change and other topics (see 28 also chapters 5 and 16). 29

Fifth, commodity prices remain high and volatile despite sluggish economic growth in major 30 parts of the world economy. High costs for food have amplified concerns about competition 31 between food production and efforts to mitigate emissions, notably through the growing of 32 bioenergy crops (see Chapter 11 Bioenergy Annex). High prices for fossil fuels along with steel 33 and other commodities affects the cost of building and operating different energy systems, a 34 topic to which we now turn. 35

1.2.1.3 The Availability, Cost and Performance of Energy Systems 36

The purpose of energy systems—from resource extraction to refining and other forms of conversion 37 to distribution of energy services for final consumption—is to provide affordable energy services to 38 fuel economic and social development. The choice of energy systems depends on a wide array of 39 investment and operating costs, the relative performance of different systems, infrastructures and 40 lifestyles. These choices are affected by many factors--notably price and performance—and the 41 assessment of different energy options depends critically on how externalities, such as pollution, are 42 included in the calculations. 43

Following a decade of price stability at low levels, since 2004 energy prices have been high and 44 volatile (see Figure 1.2). Those prices have gone hand-in-hand with substantial geopolitical 45 consequences that have included a growing number of oil importing countries focusing on policies 46 surrounding energy security (e.g., (Yergin, 2011). Some analysts interpret these high prices as a sign 47



of imminent “peak production” of exhaustible resources with subsequent steady decline while 1 others have argued that the global fossil and fissile resource endowment is plentiful (Rogner, 2012). 2 Concerns about the scarcity of resources have traditionally focused on oil (Aleklett et al., 2010), but 3 more recently the notions of peak coal (Heinberg and Fridley, 2010), peak gas (Laherrère, 2004) and 4 peak uranium (EWG, 2006) have also entered the debate (see Chapter 7.4). Two opposing trends 5 have been observed since 2004 - low investment in exploration and extraction capacity of 6 conventional oil and gas combined with unexpected surges in demand (driven by large and fast 7 growing emerging economies). 8

Just as AR4 was going into publication, sustained high prices had encourage a series of technological 9 innovations that have created the possibility of large new supplies from unconventional resources 10 (e.g., oil sands, shale oil, extra-heavy oil, deep gas, coal bed methane (CBM), shale gas, gas hydrates). 11 By some estimates, these unconventional oil and gas sources have pushed the “peak” out to the 12 second half of the 21st century” (IIASA, 2012), and they are a reminder that “peak” is not a static 13 concept. These unconventional sources have raised a number of important questions and challenges, 14 such as their high capital intensity, high energy intensity (and cost), large demands on other 15 resources such as water for production and other potential environmental consequences. 16 Consequently there are many contrasting view points about the future of these unconventional 17 resources (e.g. (Hirsch et al., 2005; Smil, 2011; IEA, 2012a; Rogner et al., 2012; Jordaan, 2012). 18

The importance of these new resources is underscored by the rapid rise of unconventional shale gas 19 supplies in North America—a technology that had barely any impact on gas supplies in 2000 and by 20 2010 accounted for one-fifth of North American gas supply with exploratory drilling elsewhere in the 21 world now under way. This potential for large new gas supplies—not only from shale gas but also 22 coal-bed methane, deep gas, and other sources—could lower emissions where gas competes with 23 coal if gas losses and additional energy requirements for the fracturing process can be kept relatively 24 small. (A modern gas-fired power plant emits about half the CO2 per unit of electricity than a 25 comparable coal-fired unit.) In the United States, 49% of net electric power generation came from 26 coal in 2006, and by 2011 that share had declined to 43% and is expected to decline further(EIA, 27 2013a; b). Of course, total U.S. emissions are affected by a wide range of other factors as well, 28 including fuel economy regulations, replacement by renewable energy sources and the overall state 29 of the economy. Worldwide, however, most projections still envision robust growth in the utilization 30 of coal, which already is one of the fastest growing fuels with total consumption rising 50% between 31 2000 and 2010 (IEA 2011c). The future of coal hinges, in particular, on large emerging economies 32 such as China and India as well as the diffusion of clean coal technologies. 33

An option of particular interest for mitigating emissions is carbon dioxide capture and storage (CCS), 34 which would allow for the utilization of coal while cutting emissions. Without CCS or some other 35 advanced coal combustion system, coal would be the most emission intensive of all the major fossil 36 fuels yet, as we discuss below, consumption of coal is expanding rapidly. Thus since AR4 CCS has 37 figured prominently in many studies that look at the potential for large cuts in global emissions (IEA 38 2010a; IEA 2011a; IIASA 2012). However, CCS still has not attracted much tangible investment. By 39 mid-2012 there are eight large-scale projects in operation globally and a further eight under 40 construction. The total CO2 emissions avoided by all 16 projects in operation or under construction 41 are about 36 million tonnes a year by 2015 (Global CCS Institute, 2012). The implementation of 42 large-scale CCS systems generally requires extensive funding and an array of complementary 43 institutional arrangements such as legal frameworks for assigning liability for long-term storage of 44 CO2. Since AR4 studies have underscored a growing number of practical challenges to commercial 45 investment in CCS (IEA 2010b). 46

Over the period since AR4 innovation and deployment of renewable energy supplies has been 47 particularly notable (IEA 2011a; IIASA 2012). The IPCC Special Report on Renewable Energy Sources 48 and Climate Change Mitigation (IPCC, 2011) provides a comprehensive assessment of the potential 49 role of renewables in reducing GHG emissions. Globally wind electricity generating capacity has 50



experienced double-digit annual growth rates since 2005 with an increasing share in developing 1 countries. While still being only a small part of the world energy system, renewable technology 2 capacities, especially wind but also solar and geothermal, are growing so rapidly that their potential 3 for large scale growth is hard to assess but could be very large (IEA 2011a; IIASA 2012). Renewable 4 energy potentials exist not only for stationary users via electricity but also for transportation through 5 biofuels. Renewable energy technologies appear to hold great promise, but like all major sources of 6 energy they also come with an array of concerns. Many renewable sources of electricity are variable 7 and intermittent, which can make them difficult to integrate into electric grids at scale (see chapter 8 8 in (IPCC, 2011). Some biofuels are contested due to fears for food security and high lifecycle 9 greenhouse gas emissions of some fuel types (see chapter 11 in (Delucchi, 2010; IPCC, 2011). Other 10 concerns are financial since nearly every major market for renewable energy has relied heavily on a 11 variety of policy support such as subsidies, leading many analysts to explore whether and how these 12 energy sources will continue to be viable for investors if subsidies are curtailed. 13

Since AR4 there have also been substantial advances in the technological possibilities for making 14 energy systems more efficient and responsive. The use of energy efficient devices, plant and 15 equipment has been legislated in many jurisdictions (RISØ, 2011). Energy networks with integrated 16 information and communication technology (ICT) that enable greater energy efficiency and flexibility 17 in energy use and the integration of variable and intermittent renewable energy sources are 18 increasingly tested in many municipalities. This interconnection offers the promise of energy 19 systems—especially in electricity where the potential for pervasive use of ICT is often called a “smart 20 grid”—that integrate demand response with supplies, allowing for smooth and reliable operation of 21 grids even with fluctuating renewable supplies (EPRI, 2011). Innovations of this type may also 22 interact with behavioural changes that can have large effects on emissions as well. 23

A central challenge in shifting to clean energy supplies and to creating much more efficient end-use 24 of energy is that many energy technologies require large capital costs with long time horizons. Thus 25 even when such technologies are cost-effective they may face barriers to entry if investors and users 26 are not confident that needed policy and market support will not be reliable. Innovations in 27 financing—for example, mechanisms that allow households to lease solar panels rather than pay the 28 full cost up front—can play a role in addressing such issues, as can public schemes to fund initial 29 deployment of new technologies. Such arrangements are part of a broader effort often called 30 “market transformation” that, if implemented well, can lead to new trajectories for deployment of 31 technologies that otherwise would face many barriers to entry (IEA, 2010c). 32

Since AR4, a large number of governments have begun to explore the expansion or introduction of 33 nuclear power. They have also faced many challenges in the deployment and management of this 34 technology. Countries with active nuclear power programmes have been contemplating replacing 35 aging plants with new builds or expanding the share of nuclear power in their electricity mix for 36 reasons of economics, supply security and mitigation climate change. In addition, more than 20 37 countries currently that have never had commercial reactors have launched national programmes in 38 preparation for the introduction of the technology and several newcomer countries have entered 39 contractual arrangements with vendors (IAEA, 2011). After the Fukushima accident, an event that 40 forced Japan to review its energy policy substantially, the future patterns in nuclear power 41 investment are more difficult to parse. Some countries have scaled back nuclear investment plans or 42 ruled out new build (e.g., Switzerland, Belgium); some, notably Germany, have decided to close 43 existing reactors. Several countries preparing the introduction of nuclear power have extended the 44 time frame for the final go-ahead decisions, only few in a very early stage of preparation for the 45 introduction stopped their activities altogether. In other countries, including all the countries that 46 have been most active in building new reactors (e.g., China, India, Russia, Finland, and South Korea), 47 there aren’t many noticeable results from Fukushima and the investment in this energy source is 48 accelerating, despite some scale-back in the wake of Fukushima (IEA, 2012a). These countries’ 49 massive investments in nuclear were much less evident, especially in China, India and South Korea, 50



at the time of AR4. The Fukushima accident has also increased investment in deployment of new, 1 safer reactor designs such as so-called “Generation III” reactors. 2

1.2.1.4 International institutions and agreements 3

For more than two decades formal intergovernmental institutions have existed with the task of 4 promoting coordination of national policies on the mitigation of emissions. In 1992 diplomats 5 finalized the United National Framework Convention on Climate Change (UNFCCC), which entered 6 into force in 1994. The first session of the Conference of the Parties (COP) to that Convention met in 7 Berlin in 1995 and outlined a plan for new talks leading to the Kyoto Protocol in 1997, which entered 8 into force in 2005. The main regulatory provisions of the Kyoto Protocol concerned numerical 9 emission targets for industrialized countries (listed in Annex B of the Treaty) during the years 2008 to 10 2012. When AR4 concluded in 2007, diplomats were in the early stages of negotiations for possible 11 amendment or replacement of the Kyoto treaty following the expiration of the original regulatory 12 goals in 2012. Those negotiations had been expected to finish at the COP 15 meeting in Copenhagen 13 in 2009, but a wide array of disagreements made that impossible. Instead, talks continued while, in 14 tandem, governments made an array of “Copenhagen pledges” concerning the policies they would 15 adopt to mitigate emissions and other related actions on the management of climate risks; some of 16 those pledges are contingent upon actions by other countries. The 86 countries that adopted these 17 pledges account for the vast majority (78%) of world emissions (UNFCCC, 2012a; b). If fully 18 implemented the pledges might reduce emissions in 2020 about one-tenth below the emissions 19 level that would have existed otherwise—not quite enough to return emissions to 2005 levels and 20 far from what is probably needed to stabilize warming at the widely discussed goals of 1.5 or 2 21 degrees. 22

At this writing, diplomatic talks are focused on the goal of adopting a new agreement that would be 23 in effect by 2020 (UNFCCC, 2012c). In tandem, governments have also made a number of important 24 decisions such as to extend the Kyoto Protocol’s regulatory obligations at least to 2020 (Höhne et al., 25 2012; UNEP, 2012). 26

The growing complexity of international diplomacy on climate change mitigation, which has been 27 evident especially since AR4 and the Copenhagen meeting, has led policy makers and scholars alike 28 to look at many other institutional forms that could complement or even partially replace the UN-29 based process. Proposals exist within the Montreal Protocol on Substances that Deplete the Ozone 30 Layer to regulate some of the gases that have replaced ozone-destroying chemicals yet have proved 31 to have strong impacts on the climate. A wide array of other institutions has become engaged with 32 the climate change issue. The G8—the group of Canada, France, Germany, Italy, Japan, Russia, the 33 UK, and the US that convenes regularly to address a wide array of global economic challenges—has 34 repeatedly underscored the importance of limiting warming to 2 degrees and implored its members 35 to take further actions. In the context of climate change negotiations, Brazil, Russia, India, China and 36 South Africa—the so-called “BRICS” countries—have met as a group in efforts to coordinate policies 37 and negotiating strategies. The G20, a much broader group of economies that has played a major 38 role in international economic cooperation ever since the Asian financial crisis of the late 1990s, has 39 put climate change matters on its large agenda, including with active efforts to reform fossil fuel 40 subsidies and to implement green growth strategies. The UN, itself, has a large number of 41 complementary diplomatic efforts on related topics, such as the “Rio+20” process. Many other 42 institutions are now actively addressing particular aspects of climate change mitigation, such as the 43 International Renewable Energy Agency - IRENA (which focuses on renewable energy), varied 44 institutions such as the International Atomic Energy Agency - IAEA (focused on nuclear power), 45 International Civil Aviation Organization (ICAO), the International Maritime Organization (IMO) (both 46 focusing on emissions from bunker fuels) and many others with expertise in particular domains. The 47 International Energy Agency (IEA) is now extensively engaged in analyzing how developments in the 48 energy sector could affect patterns of emissions (e.g., IEA 2011c). Looking across these many 49



different activities, international institutions that have engaged the climate change topic are highly 1 decentralized rather than hierarchically organized around a single regulatory framework (Keohane 2 and Victor, 2011). Since AR4 research on decentralized international institutions has risen sharply 3 (Raustiala and Victor, 2004; Alter and Meunier, 2009; Zelli et al., 2010; Johnson and Urpelainen, 4 2012), building in part on similar concepts have emerged in other areas of research on collective 5 action (e.g., (McGinnis, 1999). 6

Since the completion of the last IPCC assessment report there has been a sharp increase in scholarly 7 and practical attention to how climate change mitigation could interact with other important 8 international institutions such as the World Trade Organization (WTO) (see also Chapter 13 of this 9 volume) (Brewer, 2010). Relationships between international trade agreements and climate change 10 have been a matter of long standing interest in climate diplomacy and are closely related to a larger 11 debate about how differences in environmental regulation might affect economic competitiveness 12 as well as the spread of mitigation and adaptation technology (Gunther et al., 2012). A potential role 13 for the WTO and other trade agreements also arises because the fraction of emissions embodied in 14 internationally traded goods and services is rising with the globalization of manufacturing and rising 15 trade in embodied emissions (see 1.2.1.2 above). Trade agreements might also play a role in 16 managing (or allowing the use of) trade sanctions that could help enforce compliance with 17 mitigation commitments—a function that raises many legal questions as well as numerous risks that 18 could lead to trade wars and an erosion of political support that is essential to the sustainability of 19 an open trading system (Bacchus et al., 2010). For example, Article 3 of the UNFCCC requires that 20 “[m]easures taken to combat climate change, including unilateral ones, should not constitute a 21 means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.” 22

Since the IPCC AR4 in 2007 the scholarly community has analysed the potentials, design and 23 practices of international cooperation extensively. A body of research has emerged to explain why 24 negotiations on complex topics such as climate change are prone to gridlock (e.g., see (Murase, 25 2011; Victor, 2011; Yamaguchi, 2012). There is also a large and vibrant research program by political 26 scientists and international lawyers on institutional design, looking at issues such as how choices 27 about the number of countries, type of commitments, the presence of enforcement mechanisms, 28 schemes to reduce cost and increase flexibility, and other attributes of international agreements can 29 influence their appeal to governments and their practical effect on behaviour (see e.g., the 30 comprehensive reviews and assessment on these topics by Hafner-Burton, Victor, and Lupu (2012) 31 as well as earlier research of Abbott et al. (2000); and Koremenos, Lipson, and Snidal (2001)). Much 32 of that research program has sought to explain when and how international institutions, such as 33 treaties, actually help solve common problems. Such research is part of a rich tradition of scholarship 34 aimed at explaining whether and how countries comply with their international commitments (e.g., 35 (Downs et al., 1996; Simmons, 2010). Some of that research focuses on policy strategies that do not 36 involve formal legalization but, instead, rely more heavily on setting norms through industry 37 organizations, NGOs and other groups (e.g., (Vogel, 2008; Buthe and Mattli, 2011). The experience 38 with voluntary industry standards has been mixed; in some settings these standards have led to 39 large changes in behaviour and proved highly flexible while in others they have little or no impact or 40 even divert attention (Rezessy and Bertoldi, 2011). 41

One of the many challenges in developing and analysing climate change policy is that there are long 42 chains of action between institutions such as the UNFCCC and the ultimate actors whose behaviour 43 is affected, such as individuals and firms. We note that there have been very important efforts to 44 engage the business community on climate mitigation as well as adaptation to facilitate the market 45 transformations needed for new emission technologies and business practices to become 46 widespread(WEF, 2009; UN Global Compact and UNEP, 2012). 47



1.2.1.5 Understanding the roles of emissions other than fossil fuel CO2 1

Most policy analysis has focused on CO2 from burning fossil fuels, which comprise about 60% of total 2 global greenhouse gas emissions in 2010 (including forest-related emissions). However, the UNFCCC 3 and the Kyoto Protocol cover a wider array of warming substances—including methane (CH4), 4 nitrous oxide (N2O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs) and sulphur hexafluoride 5 (SF6). Nitrogen trifluoride (NF3) was added as a GHG under the Kyoto Protocol for its second 6 commitment period. This large list was included, in part, to create opportunities for firms and 7 governments to optimize their mitigation efforts across different substances. The effects of different 8 activities on the climate varies because the total level of emissions and the composition of those 9 emissions varies. For example, at current levels the industrial and power sectors have much larger 10 impacts on climate than agriculture (Figure 1.3). Moreover, a pulse of today’s average emissions 11 from industrial or power sector sources leads initially to partially offsetting effects as emissions 12 cause some cooling (due to aerosols that interact with clouds to reflect sunlight back to space) while 13 the overall long term effect is warming due to long-lived carbon dioxide. By contrast, current 14 emissions from agriculture have about one-quarter the total effect over twenty years and the 15 warming effects that do follow are dominated by relatively short-lived methane and longer-lived 16 nitrous oxide (see Working Group I, chapter 8 on Anthropogenic and Natural Radiative Forcing such 17 as figure 8.34). [Author note to reviewers: WG1 info is preliminary from SOD.] A variety of studies 18 have shown that allowing for trading across these different gases will reduce the overall costs of 19 action; however, many studies also point to the complexity in agreeing on the correct time horizons 20 and strategies for policy efforts that cover gases with such different properties (Reilly et al., 2003; 21 Ramanathan and Xu, 2010; Shindell et al., 2012). In addition to the gases regulated under the Kyoto 22 Protocol, many of the gases that deplete the ozone layer—and regulated under the Montreal 23 Protocol on Substances that Deplete the Ozone Layer—are also strong greenhouse gases (Velders et 24 al., 2007). 25

In addition to the UNFCCC/Kyoto gases, other short-lived climate pollutants (SLCPs) have come 26 under scrutiny (e.g. (UNEP, 2011; Shindell et al., 2012; Victor et al., 2012). Those include 27 tropospheric ozone (originating from air pollutant emissions of nitrogen oxides and various forms of 28 reduced carbon) and aerosols (such as black carbon and organic carbon and secondary such as 29 sulphates) affect climate forcing (see Chapter 8, Section 8.2.2). This remains an area of active 30 research, not least because some studies suggest that the climate impacts of short-lived pollutants 31 like black carbon (soot) could be much larger or smaller (Ramanathan and Carmichael, 2008); 32 Working Group I, chapters 7 and 8). Such pollutants could have a large role in mitigation strategies 33 since they have a relatively swift impact on the climate—combined with mitigation of long-lived 34 gases like CO2 such strategies could make it more easily feasible to reach near-term temperature 35 goals (Ramanathan and Xu, 2010). Not all short-lived pollutants cause warming. Studies that have 36 estimated global average effects of different sources pollution sources suggest that aerosols, at 37 present, currently have a net cooling effect. In particular, aerosol emissions from the industrial and 38 power sectors and large-scale biomass burning contribute to cooling, whereas black carbon from 39 road transport and residential biofuel contributes to global warming (Unger et al., 2010). 40



Table 1.1: Implications of GWP choice for mitigation strategy. Table shows the main geophysical 1 properties of the major Kyoto gases and the implications of the choice of time horizon (20, 100 or 500 2 years) on the share of weighted total emissions for 2010. NF3 is included but contributes much less 3 than 0.1%. Note that CO2 is removed by multiple processes and thus has no single lifetime, although 4 the bulk of the net removal is consistent with an approximate 100 year life time. We show CF4 as one 5 example of the class of perfluorocarbons (PFCs) and HFC-134a and HFC-23 as examples of 6 hydroflurocarbons. All other industrial fluorinated gases (“F-gases”) are summed. Emissions reported 7 in JRC/PBL (2012)(2011) using GWPs reported in IPCC’s second, fourth and fifth assessment report 8 (IPCC, 1995, 2007c, 2013). The fourth report was used for GWP-500 data. Geophysical properties of 9 the gases drawn from IPCC Working Group 1, Appendix 8.A, Table 8.A.1—preliminary data) 10

Geophysical properties GWP-weighted share of global GHG emissions

(2010)

Kyoto gases

Average atmospheric lifetime (yrs)

Instantaneous forcing (W/m2/ppb)

SAR (Kyoto) 100 years 20 years 100 years 500 years

CO2 various 1.375 x 10-5

76% 52% 73% 88%

CH4 12.2 3.63 x 10-4

16% 42% 20% 7%

N2O 121 3.03 x 10-4

6.2% 3.9% 5.5% 3.5%

HFC-134a 13.4 0.159 0.5% 0.9% 0.4% 0.2%

HFC-23 222 0.176 0.4% 0.3% 0.4% 0.5%

CF4 50,000 0.1 0.1% 0.1% 0.1% 0.2%

SF6 3,200 0.575 0.3% 0.2% 0.3% 0.5%

NF3 500 0.21 not applicable 0.0% 0.0% 0.0%

other F-gases various various 0.7% 0.9% 0.8% 0.4%

11

Starting with the first assessment report, the IPCC has calculated global warming potentials (GWPs) 12 to convert climate pollutants into common units over 20, 100 and 500 year time horizons (chapter 2, 13 IPCC First Assessment Report 1990). In the Kyoto Protocol, diplomats chose the middle value—100 14 years—despite the lack of any published conclusive basis for that choice (Shine, 2009). That 15 approach emphasizes long-lived pollutants such as CO2, which are essential to stopping climate 16 warming over many decades to centuries. As shown in Table 1.1, when GWPs are computed with a 17 short time horizon the share of short-lived gases, notably methane, in total warming is much larger 18 and that of CO2 becomes proportionally smaller. The uncertainty in the GWPs of non-CO2 19 substances increases with time horizon and for GWP100 the uncertainty is larger than 50% (IPCC, 20 2013). If policy decisions are taken to emphasize SLCPs as a means of altering short-term rates of 21 climate change rises then alternative GWPs or other metrics may be needed (IPCC, 2009; Fuglestvedt 22 et al., 2010; Victor et al., 2012). Additional accounting systems—for example to include soot, which 23 is not presently part of the Kyoto Protocol—may also be needed. 24

1.2.1.6 Emissions Trajectories and Implications for Article 2 25

Chapter 1 of the AR4 concluded that, without major policy changes, the totality of policy efforts do 26 not put the planet on track for meeting the objectives of Article 2 of the United Nations Framework 27 Convention on Climate Change (UNFCCC) (IPCC, 2007a). Since then, emissions have continued to 28 grow—a topic we examine in more detail below. Article 2 of the UNFCCC describes the ultimate 29 objective of the Convention. It states: 30

“The ultimate objective of this Convention and any related legal instruments that the 31 Conference of the Parties may adopt is to achieve, in accordance with the relevant 32 provisions of the Convention, stabilization of greenhouse gas concentrations in the 33 atmosphere at a level that would prevent dangerous anthropogenic interference with the 34



climate system. Such a level should be achieved within a time-frame sufficient to allow 1 ecosystems to adapt naturally to climate change, to ensure that food production is not 2 threatened and to enable economic development to proceed in a sustainable manner.” 3

The above goal was based, in part, on earlier diplomacy (e.g., Noordwijk Declaration on Atmospheric 4 Pollution and Climate Change (1989). Interpreting the UNFCCC goal is difficult. The first part of 5 Article 2, which calls for stabilization at levels that are not “dangerous,” requires examining scientific 6 climate impact assessments as well as normative judgments—points that are explored in detail in 7 the IPCC Working Group 2 report. The second part of Article 2 is laden with conditions whose 8 interpretation is even less amenable to scientific analysis. In light of the enormous variations in 9 vulnerability to climate change across regions and ecosystems, it is unlikely that scientific evidence 10 will conclude on a single such goal as "dangerous." Variations in what different societies mean by 11 "dangerous" and the risks they are willing to endure further amplify that observation. Article 2 12 requires that societies balance a variety of risks and benefits—some rooted in the dangers of climate 13 change itself and others in the potential costs and benefits of mitigation and adaptation. 14

Since the publication of AR4 a series of high-level political events have sought to create clarity about 15 what Article 2 means in practice. For example, the Bali Action Plan, adopted at COP 13 held in Bali, 16 Indonesia, in December 2007, cited AR4 as a guide for negotiations over long-term cooperation to 17 manage climate change. At the L’Aquila G8 Summit in 2009, five months before the COP15 meeting 18 in Copenhagen, leaders “recognized the broad scientific view that the increase in global average 19 temperature above pre-industrial levels ought not to exceed 2°C,” and they also supported a goal of 20 cutting emissions at least 80% by 2050. Later that year, an COP 15, delegates “took note” of the 21 Copenhagen Accord which recognized “the scientific view that the increase in global temperature 22 should be below 2 degree Celsius,” and later meetings arrived at similar conclusions 23 (Decision1/CP.16). Ever since the 2009 Copenhagen Conference the goal of 1.5 degrees has also 24 appeared in official UN documents, and some delegations have suggested that a 1 degree target be 25 adopted. Some scholars suggest that these goals can create focal points that facilitate policy 26 coordination, although there is a variety of perspectives about whether these particular goals are 27 playing that role, in part because of growing evidence that they will be difficult to attain (Schneider 28 and Lane, 2006; National Research Council of the National Academies, 2011; Victor, 2011; Helm, 29 2012). 30

At present, emissions are not on track for stabilization let alone deep cuts (see section 1.3 below). 31 This reality has led to growing research on possible extreme effects of climate change and 32 appropriate policy responses. For example, Weitzman (2009) raised the concern that standard policy 33 decision tools such as cost-benefit analysis and expected utility theory have difficulty dealing with 34 climate change decisions, owing to the uncertain probability of catastrophic impacts. Partly driven by 35 these concerns, the literature on geoengineering options to manage solar radiation and possibly 36 offset climate change along with technologies that allow removal of CO2 and other climate-altering 37 gases from the atmosphere has been increasing exponentially (see chapter 6.9). Geoengineering 38 schemes to alter the planet’s radiation balance have attracted particular attention because they 39 have potentially high leverage on climate, creating as well possibly many risks that are difficult if not 40 impossible to forecast and raising many challenges for the design of effective regulatory mechanisms 41 (Rickels et al. 2011; Gardiner 2010; IPCC 2012; Keith, Parson, and Morgan 2010). 42

1.2.2 New challenges for the AR5 43

These six shifts since AR4 create challenges for the AR5 assessment. For example, the flexibility of 44 viewing mitigation as part of a broader array of sustainable development goals has encouraged 45 analysts to look more closely at the factors that have (and could) encourage countries to adopt 46 policies that mitigate emissions. Policies are pursued for a reason with many reinforcing benefits 47 (known as “co-benefits”), making it hard to assign costs and benefits to any single policy in isolation. 48



The plethora of international institutions working on matters related to climate has inspired social 1 scientists to look at how these institutions might interact—including where they might conflict—2 rather than focusing just on the global UN-based organizations dedicated to the task of managing 3 climate issues. That insight has also led to many model-based assessments of future emissions, 4 mitigation and climate impacts that reflect a likely real-world “muddling through” policy rather than 5 optimal global design—a topic addressed in more detail in chapter 6 of this volume. Rising 6 awareness of the importance of pollutants beyond fossil fuel CO2—including short-lived pollutants 7 such as black carbon—require analysts and governments to look much more carefully at policy 8 strategies and their effects over different time horizons. And the evidence that the world is not on 9 track to stabilize warming at 2 degrees Celsius means that analysts have had to consider a number of 10 alternative goals, and the costs of inaction relative to the costs of accelerated policy action. 11

The full report that follows offers much more detail on these main areas where the scientific 12 understanding has shifted since AR4. Over the rest of this chapter we set the scene with information 13 about the patterns of emissions (and their causes) and the main challenges for mitigation. 14

1.3 Historical, Current and Future Trends 15

Since AR4 there have been new insights into the scale of the mitigation challenge and the patterns in 16 emissions. Notably, there has been a large shift in industrial economic activity toward the BRICS 17 countries—especially China—that has affected those nations’ emission patterns. Many countries 18 have adopted policies to encourage shifts to lower GHG emissions from the energy system, such as 19 through improved energy efficiency and greater use of renewable technologies (e.g., biofuels and 20 wind). While mitigation of CO2 emissions from fossil fuels has been limited, in many countries 21 around the world there are substantially stronger incentives to limit short-lived pollutants like black 22 carbon (soot) and methane—in part because these other pollutants are also linked to many local 23 environmental ills and thus the local benefits from mitigation are more immediate and apparent 24 (UNEP, 2011; Shindell et al., 2012). In addition to national policy efforts, a large array of mitigation 25 actions have also been planned and orchestrated by local governments, including cities that are 26 working in concert on climate change issues through partnerships such as the C40, and there is some 27 evidence that these efforts are intensifying (see chapter 15) (UNFCCC, 2011) paragraph 7). 28

1.3.1 Review of four decades of greenhouse gas emissions 29

While there are several sources of data, the analysis here relies on the EDGAR data set (JRC/PBL, 30 2012)[see WG3 Annex II Methods and Metrics for a complete delineation of emission categories]. 31 We focus here on all major direct greenhouse gases (GHGs) related to human activities—including 32 carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), perfluorocarbons (PFCs), 33 hydrofluorocarbons (HFCs) and sulphur hexafluoride (SF6). We also examine various ozone-depleting 34 substances (ODS), which are regulated under the Montreal Protocol due to their effects on the 35 ozone layer but also act as long-lived GHG: chlorofluorocarbons (CFCs), hydrochlorofluorocarbons 36 (HCFCs), and halons. (Due to lack of comparable data we do not here examine soot, cooling aerosols 37 and NF3.) For the analyses that follow we use 100-year GWPs because they are widely used by 38 governments, but we are mindful that other time horizons and other global warming metrics also 39 merit attention (see section 1.2.1.5 above). 40



1

2

3 Figure 1.3. Panel A: Allocation of GHG emissions in 2010 across the five sectors examined in detail 4 in this report. Panel B: Allocation of emissions due to electricity consumption as “indirect” emissions to 5 the main end-use sectors discussed in this report. (Emissions from the power sector are ultimately 6 linked to activities in these other sectors, notably industry and buildings.) Panel C: Emissions by gas 7 since 1970. Sources: (JRC/PBL, 2011). Emissions weighted with 100-year GWPs as used in the 8 Kyoto Protocol (i.e. values from the second IPCC report) and, in general, sectoral and 9 national/regional allocations as recommended by the 1996 IPCC guidelines (IPCC, 1996). Notes: 10 “electricity” is public and self-produced and includes heat; “other energy sector” includes refineries, 11 coal mining, oil and gas production. “Industry” includes coke ovens, blast furnaces and non-12 combustion CO2 from limestone use and from non-energy use of fuels, N2O from chemicals 13 production and include an about 2% share of emissions from F-gases: HFCs, PFCs and SF6; “Waste” 14 includes wastewater; “Transport” includes international shipping and aviation; “FOLU” includes forest 15 related emissions and CO2 from peat decomposition and peat fires. 16

17



Looking at the total source of greenhouse gases and weighting with 100-year GWPs (Table 1.1), at 1 present CO2 contributes 76%; CH4 about 16%, N2O about 6% and the combined F-gases about 2%. By 2 sector, the largest sources were the sectors of energy (68%, mainly CO2 fossil fuel use), and 3 agriculture (11%, mainly CH4 and N2O). Other sources of greenhouse gases include CO2 from biomass 4 burning (11%, mostly forest and peat fires and post-burn decay in non-Annex I countries), and 5 industrial sources such as CO2 from cement production (3%, of which half originated in China). 6

Following the breakdown in sectors discussed in this report (Chapters 7 to 11),Figure 1.3 looks at 7 emissions over time by gas and sector. Figure 1.4 looks at those patterns over time according to 8 different groups of countries, which reveals the effects of periodic economic slowdowns and 9 contractions on emissions and also shows the growing role for embodied emissions due to the 10 increasing world trade of manufactured goods (see section 1.2.1.2 above). In effect, developed 11 countries (Annex B) are importing large embodied emissions from developing countries (non-Annex 12 B). Figure 1.4 shows that, globally, emissions of all greenhouse gases increased by about 75% since 13 1970. 14

Overall, per-capita emissions in the developed world are roughly flat over time and remain about six 15 times larger than those from developing countries, although the latter have been rising steadily for 16 the last decade. There is huge variation within these categories as some very low income countries 17 have extremely low per-capita emissions while some developing countries have per-capita emissions 18 comparable with those of some industrialized nations. Box 1.1 explores some special issues that 19 affect the least developed countries. 20

Emissions from the energy sector (mainly electricity production) and from transportation dominate 21 the global trends. Worldwide those emissions have tripled since 1970, and transport has doubled. 22 Since 1990 emissions from electricity and heat production increased by 27% for the group of OECD 23 countries; in the rest of the world the rise has been 64%. Over the same period, emissions from road 24 transport increased by 29% in OECD countries and 61% in the other countries. Present global 25 greenhouse gas emissions stem for one-quarter from electricity and heat production and for one-26 third from the total energy sector. Industry (including waste) and AFOLU both contribute about one-27 quarter, with agriculture and other AFOLU (i.e. forests and other land use) each about half of total 28 AFOLU. The transport and buildings sector contribute about 13% and 7%, respectively. 29

Forest related GHG emissions are due to biomass burning and decay of biomass remaining after 30 forest burning and after logging. In addition, the data shown includes CO2 emissions from 31 decomposition of drained peatland and from peat fires (Olivier and Janssens-Maenhout, 2012). The 32 forest related figures presented here are in line with the synthesis paper by Houghton et al. (2012) 33 on recent estimates of carbon fluxes from land use and land cover change. This analysis also showed 34 the very large uncertainty in this category of the order of ±50%. In contrast, a synthesis analysis of 35 four global datasets (CDIAC, EDGAR, IEA, EIA) by Andres et al. (2012) showed that global CO2 36 emissions from fossil fuel combustion are known to within 10% uncertainty (95% confidence 37 interval) with individual national total fossil-fuel CO2 emissions ranging from a few per cent to more 38 than 50%. For total CO2 emissions the overall uncertainty range in global total emissions was 39 estimated at ±5% excluding LULUCF and ±10% including them (Andres et al., 2012; Houghton et al., 40 2012; Olivier et al., 2012). For global emissions of CH4, N2O and the F-gases uncertainty estimates of 41 25%, 30% and 20%, respectively, were assumed (UNEP, 2012). 42

43



1

2

Figure 1.4. Three Perspectives on Global Growth in Emissions. Top panel shows world emissions 3 (total and for the regions shown in figure 1.1) and major economic recessions. Bottom panels show 4 emissions for two broad groupings—the industrialized countries listed in Annex B of the Kyoto 5 Protocol and the other (mainly developing countries) not listed in Annex B. Bottom panels show 6 emissions allocated on the basis of territory (solid line) and ultimately consumption (dotted line). The 7 shaded areas are the trade balance (difference) between Annex B/non-Annex B production and 8 consumption; as the world economy becomes more integrated through trade between these 9 categories of countries the width of the shaded areas grows. Bottom left panel shows total emissions 10 and right per-capita. Sources: IPCC databases and Peters et al (2011). 11



Box 1.1. Least Developed Countries: mitigation challenges and opportunities 1

[COMMENTS ON TEXT BY TSU TO REVIEWER: Boxes highlighting further LDC-specific issues are 2 included in other chapters of the report (see chapter sections 1.3.1, 2.1, 6.3.6.6, 7.9.1, 8.9.3, 9.3.2, 3 10.3.2, 11.7, 12.6.4, 16.8) and a similar box may be added to the Final Draft of chapters, where there 4 is none in the current Second Order Draft. In addition to general comments regarding quality, 5 reviewers are encouraged to comment on the complementary of individual boxes on LDC issues as 6 well as on their comprehensiveness, if considered as a whole.] 7

The Least Developed Countries (LDCs) consist of 49 countries and over 850 million people, located 8 primarily in Africa and Asia – with 34 LDCs in Africa alone (UNFPA, 2011). These countries are 9 characterised by low income (three-year average gross national income per capita of less than $992), 10 weak human assets index (nutrition, health, school enrolment and literacy), and high economic 11 vulnerability criterion (UNCTAD, 2012a). Despite their continued marginalization in the global 12 economy, these countries’ economies grew at about 6% per year from 2000 to 2008, largely 13 stimulated by the strong pull-effect of the Asian emerging economies (Cornia, 2011). However, the 14 global economic downturn and the worsening Eurozone crisis have had an effect on most LCD 15 economies. In 2011, LDCs grew by 4.2%, 1.4 percentage lower than the preceding year, hence 16 mirroring the slowdown of growth worldwide (UNCTAD, 2012a). Many of the traditional domestic 17 handicaps remain as LDC economies continue to be locked into highly volatile external transactions 18 of commodities and low-productivity informal activities, having neither the reserves nor the 19 resources needed to cushion their economies and adjust easily to negative shocks. 20

As regards the social trends, LDCs as a group have registered encouraging progress towards 21 achieving some of the Millennium Development Goals (MDGs), especially in primary school 22 enrolment, gender parity in primary school enrolment, HIV/AIDS prevalence rates and the share of 23 women in non-agricultural wage employment (Sachs, 2012). However, there have been limited 24 successes in poverty reduction where only 4 out of 33 LDCs for which data was available are on track 25 to halve the incidence of extreme poverty between 1990 and 2015 (UNCTAD, 2011). In line with this, 26 the Istanbul Programme of Action, adopted at the 4th UN Conference on the Least Developed 27 Countries (LDC-IV) highlighted the importance of building the productive base of LDCs’ economies 28 and promoting the process of structural transformation involving an increase in the share of high 29 productivity manufacturing and an increase in agricultural productivity (UNCTAD, 2012b). 30

The LDCs’ continued reliance on climate-sensitive activities such as agriculture means that adapting 31 to climate change remains a central development focus for LDCs. Moreover, integrating mitigation 32 and adaptation actions in the context of sustainable development is now widely acknowledged as a 33 meaningful way to address the climate and development challenge (Ayers and Huq, 2009; Martens 34 et al., 2009). For LDCs, avoiding future emissions in pursuit of their development goals is critical. 35 Structural transformation in LDCs must necessarily involve massive capital injection in infrastructure, 36 which presents the opportunity for avoiding future costs of GHG mitigation and pollution abatement 37 interventions by developing clean and efficient manner (Bowen and Fankhauser, 2011). Other 38 emissions avoidance options are also available for LDCs in areas of innovative urban development, 39 improvements in material productivity (Dittrich et al., 2012) and the application of enhanced land 40 use efficiency through intensified agricultural practices and sustainable livestock management 41 (Burney et al., 2010). 42

43



Meeting the additional costs associated with decoupling policies to meet the growing infrastructure 1 gap in LDCs could be significant. This raises critical questions on prioritizing the allocation of scarce 2 resources, especially since material extraction and material consumption are extremely low in LDCs 3 (Krausmann et al., 2009). Moreover, the additional costs could deter private investors in low carbon 4 interventions, leaving the public sector with additional burdens, at least in the short-term (UN DESA, 5 2009; Collier and Venables, 2012). For most LDC governments, creating the conditions for 6 accelerated economic growth and broad-based improvements in human well-being will remain the 7 main driver national development policies. Hence, low carbon development will need to be framed 8 in the context of the development benefits it is likely to be accompanied with (Moomaw and Papa, 9 2012). 10

11

Figure 1.5. Greenhouse gas emissions since 1970 in the five economic sectors covered in chapters 12 7-11, organized by country grouping (see caption to figure 1.1). 13

When including indirect GHG emissions from electricity consumption to electricity end-use sectors, 14 the main sectors affected are the industrial and residential sectors, which shares in global GHG 15 emissions then increase by 10%- and 14%-points to 32% and 20%, respectively (see chart B on Figure 16 1.3). The addition of these so-called “scope 2” emissions is sometimes done to show or analyse the 17 more comprehensive impact of total energy consumption of these end-use sectors to total energy-18 related emissions. 19

Figure 1.5 looks at these patterns from the global perspective over time. The AR4 report worked 20 with the most recent data available at the time (2004). Since then, the world has seen sustained 21 accelerated annual growth of emissions—driven by CO2 emissions from fossil fuel combustion. There 22 was a temporary levelling off in 2008 linked to high fuel prices and the economic crisis that started in 23 North America, but the sustained economic growth in the emerging economies has fuelled 24 continued growth in world emissions since then. This is particularly evident in the economic data 25 (Figure 1.1) showing that the developing countries that are members of the G20—such as China and 26 India—continue to grow despite the world economic crisis and emissions from that group of 27 countries (Figure 1.4 and Figure 1.5) are rising as well. 28

It is possible to decompose the trends in emissions into the various factors that “drive” these 29 outcomes—an exercise shown in Figure 1.6. Total emissions are the product of population, GDP per 30



capita, energy intensity (total primary energy supply per GDP) and the carbon intensity of the energy 1 system (carbon emitted per unit energy). This approach is also known as the “Kaya Identity” (Kaya, 2 1990) and resonates with similar earlier work (Holdren and Ehrlich, 1974). A variety of studies have 3 done these decompositions (e.g., (Raupach et al., 2007; Cline, 2011; Steckel et al., 2011). 4

The analysis reveals enhanced growth in the 2000s of global income, which drove higher primary 5 energy consumption and CO2 emissions. (That pattern levelled around 2009 when the global 6 recession began to have its largest effects on the world economy.) Also notable in Figure 1.6 is 7 carbon intensity: the ratio of CO2 emissions to primary energy. On average, since 1970 the world’s 8 energy system has decarbonized. However, in the most recent decade there has been a slight re-9 carbonization due to the rising importance of coal, especially in the rapidly growing developing 10 countries. By contrast, across the highly industrialized world this ratio has been declining due to the 11 shift away from high carbon fuels (notably coal) to natural gas and also to renewables. Technological 12 change might allow for radically lower emissions in the future, but the pattern over this four-decade 13 history suggests that the most important driver of emissions is economic growth. 14

In the large emerging economies (the developing country members of the G20), today’s levels of 15 carbon intensity and energy intensity are comparable with those of North America in the early 1980s 16 (IEA, 2012b). It may be expected that they will follow similar trends as these countries in the future. 17 Chapter 5 of this report offers a more in-depth region-by-region analysis of Kaya identities (see 18 chapter 5.2 and 5.3). 19

20 Figure 1.6 The “Kaya Identity” components and their effect on total emissions levels. Decomposition 21 of decadal absolute changes in global energy-related CO2 emissions by the factors in the “Kaya 22 identity”; population (blue), GDP per capita (red), energy intensity (green) and carbon intensity 23 (purple).The bar segments show the changes that would occur due to each factor alone, holding the 24 respective other factors constant. Total decadal changes are indicated by a black triangle. Changes 25 are measures in gigatonnes (Gt) of CO2 emissions. Source: updated from Steckel et al. (2011) using 26 data from IEA (2012b; c). 27

28



1.3.2 Perspectives on Mitigation 1

Looking to the future, it is important to be mindful that the energy system is slow to change, even in 2 the face of concerted policy efforts (Davis et al., 2010; WEF, 2012). For example, many countries 3 have tried to alter trends in CO2 emissions reflecting the impact of policies aiming to improve energy 4 efficiency and to increase the use of nuclear or renewable energy sources over that of fossil fuels 5 (Chapter 7). So far, while energy efficiency and demand side management measure continue to offer 6 significant lowest cost mitigation benefits and substantial co-benefits, the rate of market uptake has 7 been below its economic potential (GEA, 2012). Chapter 6 in this volume addresses the wide range 8 of risks and opportunities associated with supply and demand side technologies in more detail. 9 Renewable energy’s share of the global primary energy supply is just over 8% of total primary energy 10 supply in 2010 when excluding traditional woodfuels and over 16% when including fuelwood and 11 charcoal . The share of nuclear power, the other major non-fossil energy source, remained constant 12 at about 6%, for many years, with nuclear capacity increasing in line with increasing global energy 13 consumption. Since 2005 the growth in nuclear capacity has slowed and as a consequence the 14 nuclear share has declined by half a percentage point. The share of fossil fuels in the world’s 15 commercial energy system (excluding traditional woodfuels, many of which are gathered privately 16 and not traded in markets) is barely changed from 1990 to 2010 (88% and 86% respectively) (IEA, 17 2012d). Similarly, fundamental changes in land use patterns are likely to unfold only slowly, 18 suggesting that emissions from AOFLU sources are also likely to change only slowly over time. 19

There are many different perspectives on which countries and peoples are accountable for the 20 climate change problem, which should make the largest efforts, and which policy instruments are 21 most practical. Many of these decisions are political, but scientific analysis can help frame some of 22 the options. Here we look at six different perspectives on the sources and possible mitigation 23 obligations for world emissions—illustrated on Figure 1.7 and elsewhere in the text. 24

One perspective, shown in panel A of Figure 1.7, concerns total emissions and the countries that 25 account for that total. About ten countries account for 70% of world emissions, if the 27 members of 26 the EU are treated as a single country. This suggests that while all countries have important roles to 27 play, the overall impact of mitigation efforts are highly concentrated in a few. 28

A second perspective concerns the accumulation of emissions since the climate problem is 29 fundamentally due to the “stock” of emissions that builds up in the atmosphere. How countries and 30 regions contribute to global GHG emissions depends on whether accounting systems focus on the 31 total emissions that have accumulated in the atmosphere (left bar of panel A) or current emissions 32 (middle and right bars). Panel B takes this cumulative perspective—looking just at CO2 emissions 33 from burning fossil fuels and changes in land use—and shows that developed countries have for 34 many years accounted for the largest share of the emissions that have accumulated in the 35 atmosphere since the industrial revolution, but in recent years the share for developing countries is 36 nearly equal. Because of the long atmospheric lifetime of CO2, a fraction of the CO2 emitted to the 37 atmosphere from James Watt’s steam engine that in the late 18th century helped trigger the 38 industrial revolution still remains in the atmosphere. Several studies have accounted in detail for the 39 sources of emissions from different countries over time, taking into account the geophysical 40 processes that remove (at different speeds for different gases, see Table 1.1) these gases (Botzen et 41 al., 2008; Höhne et al., 2011; Wei et al., 2012). 42

A third perspective concerns the effects of international trade. So far, nearly all of the statistics 43 presented in this chapter have been organized mainly according to the nation where the emissions 44 are released into the atmosphere. In reality, of course, some emissions are “embodied” in products 45 that are exported and discussed in more detail in section 1.2.1.2. A ton of steel produced in China 46 but exported to the United States results in emissions in China when the fundamental demand for 47 the steel originated in the U.S. Comparing the middle and right bars of panel A shows that the total 48 current accounting for world emissions varies considerably—with the largest effects on China and 49



the United States—although the overall ranking does not change much when these trade effects are 1 included. 2

A fourth perspective looks at per-capita emissions, shown in panel C of Figure 1.7. This perspective 3 draws attention to fundamental differences in the patterns of development of countries and the 4 sizes of populations. It suggests that emission control obligations—and perhaps even emission rights 5 in a global emission trading scheme---be allocated along lines of population. While the main driving 6 force for most emissions is the state of the economy, for some countries land use changes (e.g., 7 deforestation) play a large role, which helps account for the particularly high per-capita emissions in 8 Indonesia, for example, when compared with other countries at the same level of per-capita income. 9 Other studies have examined per-capita emissions in a more fundamental shift that would assign 10 responsibility for emissions to individuals rather than nations (Chakravarty et al., 2009). Looking 11 within the categories of countries shown in panel C, some developing countries already have higher 12 per-capita emissions than some industrialized nations. 13

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Figure 1.7 (previous pages): Multiple Perspectives on Climate Mitigation. Panel A: Cumulative 1 emissions since 1750 (left) and current emissions using the consumption (middle) and production 2 (right) methods of accounting. Panel B: Allocation of rising CO2 concentrations due to combustion of 3 fossil fuels and changes in land use in developing countries (i.e., countries not listed in Annex I of the 4 UNFCCC) and developed countries. Panel C: per-capita emissions for major emitting countries (same 5 countries as on panel A), shown as a cumulative function of population. Orange shading is CO2 from 6 fossil fuels; green is from changes in land use and blue is other Kyoto gases. Panel D: Same as 7 panel C except countries ranked by carbon intensity of their economies (emissions per unit GDP, 8 weighted with purchasing power parity). Panel E: Emissions changes from 1990 to 2012 divided into 9 Annex B of the Kyoto Protocol (countries with quantified emission targets, dark green), countries that 10 were eligible for Annex B but are not members (Canada and the U.S., light green) and non-Annex B 11 countries (red). Sources: Panels A, C and D adapted from data reported in (Olivier et al., 2011); Panel 12 B reprinted from S.2 in (Wei et al., 2012). 13

A fifth perspective is the efficiency of the national economy, examined in Figure 1.6 and on panel D 14 of Figure 1.7. This perspective draws attention to the emission intensity of economies, commonly 15 measured as the ratio of emission to unit economic output (CO2/GDP). Typically, economies at an 16 earlier stage of development rely heavily on extractive industries and primary processing using 17 energy intensive methods often reinforced with subsidies that encourage excessive consumption of 18 energy. As the economy matures it becomes more efficient and shifts to higher value-added 19 industries, such as services, that yield low emissions but high economic output. From this 20 perspective, emission obligations should reflect the pattern of economic development and should 21 reward economies that make a rapid transition to low intensity. 22

A sixth perspective (panel E of Figure 1.7 looks at the relationship between emissions and mitigation 23 obligations under the Kyoto Protocol. That panel divides the world into two groups—the Annex I 24 countries that agreed to targets under the Kyoto Protocol (and which most of those nations formally 25 ratified, making them binding law) and the non-Annex I countries that joined the Kyoto Protocol but 26 had no formal quantitative emission control targets under the treaty. The Annex I countries 27 excluding Canada and the USA, have a target of reducing their greenhouse gas emissions by 4.2 % on 28 average for the period 2008-2012 relative to the base year, which in most cases is 1990. (We treat 29 Canada and the U.S. differently from other Annex I countries because the former withdrew from the 30 treaty and the latter never ratified.) For 2008-2012, the countries that ratified the Kyoto Protocol 31 and adopted national emission targets are certain to comply with their collective target quite 32 comfortably even without obtaining emission credits through the Kyoto Protocol’s Clean 33 Development Mechanism (CDM). However, there are large national differences and some individual 34 countries will not meet their national target without emissions trading and need to purchase 35 emission credits from other countries (Den Elzen et al., 2009, 2011). The trends on this panel reflect 36 many distinct underlying forces. The big decline in Ukraine, Russia, the 12 new members of the EU 37 (EU+12) and one of the original EU members (Germany, which now includes East Germany) reflect 38 restructuring of those economies in the midst of a large shift away from central planning. The 39 relatively flat emissions patterns across most of the industrialized world reflect the normal growth 40 patterns of mature economies. The sharp rise in emerging markets, notably China and India, reflect 41 their rapid industrialization—a combination of their stage of development and pro-growth economic 42 reforms. 43

There are many ways to interpret the message from this sixth perspective, which is that all countries 44 are likely to comply with the Kyoto Protocol. One interpretation is that treaties such as the Kyoto 45 Protocol have had some impacts on emissions, which is why nearly all the countries that ratified the 46 Kyoto obligations are likely to comply. Another interpretation is that the Kyoto Protocol is a fitting 47 illustration of the concept of “common but differentiated responsibility,” which holds that countries 48 should undertake different efforts and that those most responsible for the underlying problem 49 should do the most. Still another interpretation is that choice of Kyoto obligations largely reveals 50 “selection effects” through which countries, in effect, select which international commitments to 51 honour. Countries that could readily comply adopted and ratified binding limits; the others avoided 52



such obligations—a phenomenon that, according to this perspective, is evident not just in climate 1 change agreements but other areas of international cooperation as well (see generally Downs, 2 Rocke, and Barsoom (1996); Victor (2011)). 3

Still other interpretations are possible as well, with varied implications for policy strategies and the 4 allocation of burdens and benefits among peoples and nations. 5

1.3.3 Scale of the Future Mitigation Challenge 6

Future emission volumes and their trajectories are hard to estimate, and there have been several 7 intensive efforts to make these projections. Most such studies start with one or more “business as 8 usual (BAU)” projections that show futures without any policy interventions, along with scenarios 9 that explore the effects of policies and sensitivities to key variables. Chapter 5 looks in more detail at 10 the long term patterns in such emissions, and Chapter 6 examines the varied models that are widely 11 used to make emission projections. Using a database of those models described in Chapter 6, Figure 12 1.6 also shows the emission trajectories that are consistent with a variety of widely-discussed goals, 13 such as stabilizing warming at 1.5 or 2 degrees. There is no precise relationship between such 14 temperature goals and emissions largely because the sensitivity of the climate system to changes in 15 atmospheric concentrations is not known with precision. There is also uncertainty in the speed at 16 which future emissions will be net removed from the atmosphere since that removal process 17 determines the fraction of emissions that remains and accumulates, as examined in more detail in 18 panel C of Figure 1.7. If removal processes are relatively rapid and climate sensitivity is low, then a 19 relatively large quantity of emissions might lead to small changes in global climate. If those 20 parameters prove to have less lucky values then even modest increases in emissions could have big 21 impacts on climate. The range of those values is reflected in the range of the colored bars in Figure 22 1.8. While these uncertainties in how the natural system will respond are important, recent research 23 suggests that a wide uncertainties in social systems—such as the design of policies and other 24 institutional factors—are likely to be a much larger factor in determining ultimate impacts on 25 warming from human emissions (Rogelj et al., 2012). 26

Figure 1.8 underscores the scale of effort that would be needed to move from likely future emissions 27 to meet widely discussed goals. A variety of studies has probed whether emission reduction pledges, 28 such as made in the aftermath of the Copenhagen conference, would be sufficient to put the planet 29 on track to meet the 2 degree target (Den Elzen et al., 2011; Rogelj et al., 2011). For example, Den 30 Elzen et al. (2011) found the gap between allowable emissions to maintain a “medium” chance (50-31 66%) of meeting the 2 degree target and the total reduction estimated based on the pledges made 32 at and after COP 15, are as big as 2.6-7.7 GtCO2e in 2020 when considering least-cost scenarios. Cline 33 finds that in order to achieve 2 degree target by converging global per capita emissions equal by 34 2050, emissions must be reduced by 89% for industrial countries (91% for the United States) and 35 69% for developing countries (88% for China) by 2050 respectively from baseline emissions (Cline, 36 2011). And according to Yamaguchi (2012), in order to reduce global CO2 emissions by 50%, even if 37 Annex I countries are successful to reduce their per capita CO2 emissions by 80% from 11t (in 2000) 38 to 2.2t CO2 by 2050, the room left for Non- Annex I countries’ per capita emissions in that year 39 would be 1.1 tCO2. Such a goal seems extraordinary challenging in view of the fact that Non-Annex I 40 countries’ per capita emissions have already (by 2009) increased to 2.7tCO2. By logical extension, 41 limiting warming to 1.5 degrees (or even 1 degree, as some governments and analysts suggest 42 should be the goal) is even more challenging. In a major inter-comparison of energy models, only 8 43 among 14 scenarios found that emissions controls broadly consistent with limiting warming to 2 44 degrees would be achievable even under optimal conditions in which all countries participated 45 promptly in global regulation of emissions and a temporary overshooting of the 2 degree goal is 46 allowed (Clarke et al., 2009). If some portions of the developing world are allowed to delay their 47 participation, which is a politically likely, then only 2 of 14 models found the 2o goal achievable. Most 48



of those scenarios were based on emission controls that envisioned approximately a 60% reduction 1 in CO2 emissions below 2000 levels by 2050—a major and probably costly task. 2

It is impossible to say with precision whether any particular goal is achievable because the models 3 that are used to analyze emissions must contend with many uncertainties about how the real world 4 will evolve. While the list of those uncertainties is long, the model outcomes are particularly 5 sensitive to five that are discussed in much more detail in chapter 6: 6

Participation. Studies typically analyze scenarios in which all nations participate with the same 7 timing and level of effort, which also probably leads to the least costly total level of effort. 8 However, a variety of “delayed participation” scenarios are also analyzed, and with delays it 9 becomes more difficult (and costly) to meet mitigation goals. 10

International institutions. Outcomes such as global participation will require effective 11 institutions, such as international agreements and schemes like international trading of 12 emission offsets and financial transfers. If those institutions prove difficult to create or less than 13 optimally effective then mitigation goals are harder to reach. 14

Technology. The least cost outcomes (and greatest ease in meeting mitigation goals) requires 15 that all emission control technologies be available as quickly as possible. In many models, 16 meeting aggressive goals also requires the availability of negative emission technologies—for 17 example, power plants fired with biomass and including carbon sequestration. No such plant 18 actually exists in the world today and with pessimistic assumptions about the availability of such 19 technologies it becomes much harder or impossible to reach aggressive mitigation goals. 20

Economic growth. If growth is high then so are emissions (and in some models, so is the rate of 21 technological innovation). More pessimistic assumptions about growth can make emission goals 22 easier to reach (because there is a smaller gap between likely and desired emissions) or harder 23 to reach (because technologies will not be invented as quickly). 24

Peak timing. Because long-term climate change is driven by the accumulation of long-lived 25 gases in the atmosphere (notably CO2), these models are sensitive to the exact year at which 26 emissions peak before emission reductions slow and then stop accumulation of carbon in the 27 atmosphere. Models that allow for early peaks create more flexibility for future years, but that 28 early peak also requires the early appearance of mitigation technologies. Later peak years allow 29 for delayed appearance of new technologies but also require more aggressive efforts after the 30 peak. 31



1 Figure 1.8. The Scale of the Mitigation Effort Needed. Top Panels shows 26 Long term runs from 7 2 models that explore four different visions of the world: baseline emissions, policy that is fragmented, 3 policy that is consistent with the public proclamations of the G8 (ie, industrialized countries cutting 4 emissions 80% by 2050, full implementation of the Copenhagen pledges, and substantial reductions 5 by developing countries), and optimal policies needed to stabilize emissions at 450ppm CO2(e), 6

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which is broadly consistent with warming of about 2 degrees. Middle Panel looks at near term 1 emissions consistent with that 450ppm goal. As the 450ppm goal looks increasingly difficult, also 2 shown are results for a 550 ppm CO2(e) goal, which probably corresponds with about 3 degrees of 3 warming. [Author note to reviewers: previous sentence to be updated per input from WG1 and also 4 review by the IAM teams in chapter 5.] For middle and bottom panels, individual model results (254 in 5 middle panel; 240 in bottom panel) are indicated with colors referring to scenario classification as not-6 to-exceed (NTE) vs. overshoot (OS); CO2 equivalence in terms of Kyoto gas contributions or total 7 contributions to forcing; availability of a negative emissions technology; and timing of international 8 participation (full vs. delay). Also shown are the range of pledges made in the aftermath of the 9 Copenhagen meeting and reaffirms and clarified in Cancun in 2010, suggesting that those pledges 10 are likely consistent with a 550ppm goal but probably not 450. Sources: EMF27 databases 11 summarized in [Author note: cite to EMF27 overview paper will be added once it clears review]; 12 additional discussion in chapter 6. 13

In general, only when the most optimistic assumptions are made—such as permission for some 14 temporary overshooting of goals and allowing models the maximum flexibility in the technologies 15 that are utilized and the countries that make efforts—is the result is a least cost, “optimal” outcome. 16 Since AR4 the modeling community has devoted much more attention to varying those assumptions 17 to allow for less flexible assumptions that are typically better tuned to real world difficulties. These 18 more realistic assumptions are often called “second best.” At present, with the most optimistic 19 assumptions many models suggest that the goal of reaching 2 degrees is feasible. With a variety of 20 second best assumptions that goal is much more difficult to reach, and some models find the goal 21 infeasible. These practical difficulties suggest that while optimal analyses are interesting, the real 22 world is likely to follow pathways that are probably more costly and less environmentally effective 23 than optimal outcomes. They are also a reminder that such models are a portrayal of the world that 24 is necessarily simplified and highly dependent on assumptions. There can be many unforeseen 25 changes that make such goals easier or more difficult to reach. For example, unexpectedly high 26 economic growth and expansion of coal-fired electricity has raised emissions and made goals harder 27 to reach; unexpected innovations in renewables, energy efficiency and natural gas are possibly 28 making goals easier to reach. 29

1.4 Mitigation Challenges and Strategies 30

While this report addresses a wide array of subjects related to climate change, our central purpose is 31 to discuss mitigation of emissions. The chapters that follow will examine the challenges for 32 mitigation in more detail, but five are particularly notable. These challenges, in many respects, are 33 themes that will weave through this report and appear in various chapters. 34

1.4.1 Reconciling priorities and achieving sustainable development 35

Climate change is definitely one of the most serious challenges human beings face. However, it is not 36 the only challenge. For example, a survey of the Millennium Development Goals (MDGs) offer 37 examples of the wider array of urgent priorities that governments face. These goals, worked out in 38 the context of the United Nations Millennium Declaration in September 2000, cover eight broad 39 goals that span eradication of extreme poverty and hunger, reduction of child mortality, combating 40 HIV/AIDS, malaria and other diseases, and eighteen targets have been set. For example, halving, 41 between 1990 and 2015, the proportion of people whose income is less than $1 a day, and halving, 42 between 1990 and 2015, the proportion of people who suffer from hunger, are among targets under 43 the goal of eradicate extreme poverty and hunger. (Since then, the official poverty level has been 44 revise upwards to $1.25/day by the World Bank.) MDGs are unquestionably the urgent issues human 45 beings should cope with immediately and globally. Achieving such goals along with an even broader 46 array of human aspirations is what many governments mean by “sustainable development” as 47 echoed in many multilateral statements such as the declaration from the Rio +20 conference in 2012 48 (United Nations, 2012). 49



All countries, in different ways, seek sustainable development, and each puts its priorities in 1 different places. Those priorities also vary over time—something evident as immediate goals such as 2 job creation and economic growth have risen in salience in the wake of the global financial crisis of 3 the late 2000s. Moreover, sustainable development requires tradeoffs and choices because 4 resources are finite. There have been many efforts to frame priorities and determine which of the 5 many topics on global agendas are most worthy. Making such choices, which is a highly political 6 process, requires looking not only at the present but also posterity (Summers, 2007). Applying 7 standard techniques for making tradeoffs—for example, cost-benefit analysis (CBA)—is extremely 8 difficult in such settings, though importance of CBA itself is well recognized (Sachs, 2004). Important 9 goals, such as equity, are difficult to evaluate alongside other goals that can more readily be 10 monetized. Moreover, with climate change there are additional difficulties such as accounting for 11 low probability but high impact catastrophic damages and estimating the monetary value of non-12 market damages (Nussbaum, 2000; Weitzman, 2009). 13

1.4.2 Uncertainty and Risk Management 14

The policy challenge in global climate change is one of risk management under uncertainty. The 15 control of emissions will impose costs on national economies, but the exact amount is uncertain. 16 Those costs could prove much higher if, for example, policy instruments are not designed to allow 17 for flexibility. Or they could be much lower if technological innovation leads to much improved 18 energy systems. Mindful of these uncertainties, there is a substantial literature on how policy design 19 can help contain compliance costs, allowing policy makers to adopt emission controls with greater 20 confidence in their cost (e.g., (Metcalf, 2009). 21

Perhaps even more uncertain than the costs of mitigation are the potential consequences of climate 22 change. As reviewed elsewhere in the IPCC assessment there is growing evidence that feedbacks 23 along with high degrees of climate change could lead to impacts much greater than most analysts 24 originally expected—for example, higher sea levels and greater impacts on natural ecosystems (later 25 add citation to relevant parts of IPCC WG2; see also IPCC WG1, chapters 11-14 and Annex I). 26 Investments in adaptation, which vary in their feasibility, can help reduce exposure to climate 27 impacts and may also lessen uncertainty in the assessment of possible and probable impacts (World 28 Bank, 2010). 29

Since risks arise on both fronts—on the damages of climate change and on the costs of mitigation 30 responses—scholars often call this a “risk-risk” problem. In the case of climate change, management 31 in this context of risk and uncertainty must contend with another large challenge. Mitigation actions 32 and effects of climate change involve a multitude of actors working at many different levels, from 33 individual firms and NGOs to national policy to international coordination. The interest of those 34 different actors in undertaking climate mitigation also varies. Moreover, this multitude faces a large 35 array of decisions and can deploy many different instruments that interact in complex ways. Chapter 36 2 explores the issues involved with this multitude of actors and instruments. And Chapter 3 37 introduces a framework for analysing the varied policy instruments that are deployed and assessing 38 their economic, ecological, ethical and other outcomes. 39

Scientific research on risk management has several implications for managing the climate change 40 problem. One is the need to invest in research and assessment that can help reduce uncertainties. In 41 relation to climate change these uncertainties are pervasive and they involve investments across 42 many intellectual disciplines and activities, such as engineering (related to controlling emissions) and 43 the many fields of climate science (related to understanding the risks of climate change). In turn, 44 these knowledge generating and assessment processes must be linked to policy action in an iterative 45 way so that policy makers can act, learn, and adjust while implementing policy measures that are 46 “robust” across a variety of scenarios (McJeon et al., 2011). Another major implication is the need to 47 examine the possibilities of extreme climate impacts. These so called “tail” risks in climate impacts 48



could include relatively rapid changes in sea level, feedbacks from melting permafrost that amplify 1 the concentrations of greenhouse gases in the atmosphere, or possibly a range of so far barely 2 analysed outcomes (see generally Weitzman (2011). One element of such a risk management 3 approach may be “geoengineering” that could crudely offset the impacts of some climate change 4 (Cicerone, 2006). Since AR4 a growing number of studies have looked at geoengineering options—5 the technology, possible impacts and risks of testing and deploying geoengineering, and strategies 6 that might be needed to govern geoengineering (Barrett, 2008; Victor, 2008; The Royal Society, 7 2009). 8

1.4.3 Encouraging international collective action 9

Unlike many matters of national policy, a defining characteristic of the climate change issue is that 10 its sources are truly global. Nearly all climate-altering gases have atmospheric lifetimes sufficiently 11 long that it does not matter where on the planet they are emitted. They spread worldwide and 12 affect the climate everywhere. Thus national governments develop their own individual policies with 13 an eye to what other nations are likely to do and how they might react. Even the biggest emitters 14 are mostly affected by emissions from other countries rather than principally their own pollution. 15 International collective action is unavoidable. 16

Collective action is needed on many fronts. Those include not only coordination on policies to 17 control emissions but also collective efforts to promote adaptation to climate change. International 18 coordination is also needed to share information about best practices in many areas. For example, 19 many of the promising options for reducing emissions involve changes in behaviour; governments 20 are learning which policies are most effective in promoting those changes and sharing that 21 information more widely can yield practical leverage on emissions. Coordination is also essential on 22 matters of finance since many international goals seek action by countries that are unwilling or 23 unable to pay the cost fully themselves. 24

1.4.4 Promoting Investment and Technological Change 25

Successful mitigation will require moving towards a low carbon development pathway, and the level 26 of effort needed is probably very large in light of the huge gap between likely future emissions and 27 the levels needed to reach widely discussed goals. Delinking GHG emissions from GDP growth will 28 probably require massive changes in technology. In turn, that will require closer attention to 29 technology innovation and deployment strategies. Technologies vary in many ways--they have 30 different maturity stages and potential for improvement through “learning”; they have different 31 carbon mitigation potentials and require different policy responses in developing and developed 32 countries. Other studies have looked in detail at how this diversity of approaches might influence 33 climate policy discussions in the future (WBCSD, 2009). But all low GHG technology options share 34 one commonality - a shift in the cost structure of supplying energy services, i.e., from operating/fuel 35 costs to upfront capital costs. Mobilizing investments is therefore key for climate protection (as well 36 as coping with the impacts of climate change). 37

To stimulate investment in appropriate technologies at the right time and place, it will help if 38 countries and other key actors such as firms would consider the full life cycle of technology and 39 enable a portfolio of technologies to be developed in parallel, not sequentially. In addition, it is 40 important to consider the life-cycle and turnover of existing capital infrastructure as new low-carbon 41 technologies are phased in and new long-term energy infrastructure is built. 42

International cooperation, finance and technology transfer have an important role to play as a 43 catalyst to accelerate technology progress at each stage (see chapter 13 on international 44 cooperation). Businesses have been historically active in international cooperation in the 45 deployment of technologies. For example, wind turbine manufacturers and developers frequently 46 cooperate with local partners on the deployment of wind energy in different markets, including 47



training sub-suppliers, transferring technological know-how in the form of, inter alia, personnel 1 training, and implementing high-level quality standards. Such outcomes probably require more 2 active efforts to ensure the exchange of research outcomes that are in the public domain and 3 creation of mechanisms to ensure that private knowledge also diffuses more widely where 4 economically appropriate. 5

A point of common ground is on the pivotal role of energy efficiency. The business case for energy 6 efficiency is clear and includes: reducing levelized costs of energy services, alleviating energy 7 dependency, decreasing vulnerability to energy price volatility, reducing emissions and improving 8 the efficient use of natural resources. Energy efficiency can generate positive returns on investment 9 and has the potential to promote high value adding activities and job creation. The deployment of 10 energy efficient technologies can alleviate energy supply shortages and contribute to reducing 11 energy supply investment requirements at lower total system costs. Numerous studies indicate that 12 it will be unlikely to avoid dangerous anthropogenic interference with the climate system without 13 drastic efficiency improvements (but also life style changes) (Huntington and Smith, 2011a; UNECE, 14 2010; OECD, 2011; IEA, 2012e; Riahi et al., 2012). 15

After the Fukushima Daiichi accident, life style and behavioural change curbed energy demand by 5% 16 during the winter 2011/12 compared with the previous year (after accounting for degree day 17 differences). Similarly, electricity demand in the Tokyo area was 10-15% lower in the summer 2012 18 than in 2010. 19

However, energy efficiency faces barriers when it comes to implementation—for example, the 20 difficulty in obtaining reliably information about the cost and performance of installing more 21 efficient technologies—that policy reforms can help to address. Energy efficiency policies and 22 measures need to be integral part of energy sector reform ensuring that market signals (prices) fully 23 reflect the true cost of producing and consuming energy services and thus stimulate investment in 24 energy efficiency (United Nations - Energy, 2010). While energy efficiency often offers least-cost 25 energy services, consumer decisions are based upon multiple criteria that in addition to least-costs 26 include “quality, reliability, convenience and many other traits that may have little to do with energy 27 efficiency. As a result, these factors reduce the projected gains in energy efficiency relative to those 28 based upon only the technology performances and costs in isolation from these other conditions” 29 (Huntington and Smith, 2011b). 30

At the same time, the potential of end-use energy efficiency must neither be under- or 31 overestimated. Efficiency improvements that lower service costs may directly or indirectly induce 32 additional demand (rebound effect) for energy services, thus partly offset the efficiency gains 33 (Sorrell et al., 2009; Lee and Wagner, 2012). While many policy efforts focus on end-use efficiency, 34 improvements in efficiency are relevant across the entire value chain from primary energy supplies 35 to final users. 36

1.4.5 Rising Attention to Adaptation 37

For a long time, nearly all climate policy has focused on mitigation. Now, with some change in 38 climate inevitable (and a lot more likely) there has been a shift in emphasis to adaptation. While 39 adaptation is beyond the scope of this report, there are important interactions between mitigation 40 and adaptation in the development of a climate mitigation strategy. If it is expected that global 41 mitigation efforts will be limited then adaptation (and perhaps also geoengineering) will play a larger 42 role in overall policy strategy. If it is expected that countries (and natural ecosystems) will find 43 adaptation particularly difficult then societies should become more heavily invested in the efforts to 44 mitigate emissions (and perhaps also prepare geoengineering). 45

Mitigation and adaptation also have quite different implications for collective action by nations. A 46 strategy that relies heavily on mitigation requires collective action because no nation, acting alone, 47 can have much impact on the global concentration of warming pollutants. Even the biggest nations 48



account for only one-quarter of emissions. By contrast, most activities relevant for adaptation are 1 local—while they may rely, at times, on international funding and know-how they imply local 2 expenditures and local benefits. The need for (and difficulty of) achieving international collective 3 action is perhaps less daunting than for mitigation (Victor, 2011). 4

Developing the right balance between mitigation and adaptation requires many trade-offs and 5 difficult choices. In general, societies most at risk from climate change—and thus most in need of 6 active adaptation—are those that are least responsible for emissions. That insight arises, in part, 7 from the fact that as economies mature they yield much higher emissions but they also shift to 8 activities that are less sensitive to vagaries of the climate. Other tradeoffs in striking the 9 mitigation/adaptation balance concern the allocation of resources among quite different policy 10 strategies. The world has spent more than 20 years of diplomatic debate on questions of mitigation 11 and has only more recently begun extensive discussions and policy planning on the strategies 12 needed for adaptation. 13

1.5 Roadmap for WG III report 14

The rest of this report is organized into four major sections. 15

First, chapters 2-5 introduce fundamental concepts and framing issues. Chapter 2 focuses on risk and 16 uncertainty. Almost every aspect of climate change—from the projection of emissions to impacts on 17 climate and human responses—is marked by a degree of uncertainty and requires a strategy for 18 managing risks; since AR4 a large number of studies has focused on how risk management might be 19 managed where policies have effects at many different levels and on a diverse array of actors. 20 Scholars have also been able to tap into a rich literature on how humans perceive (and respond to) 21 different types of risks and opportunities. Chapter 3 introduces major social, economic and ethical 22 concepts. Responding to the dangers of unchecked climate change requires tradeoffs and thus 23 demands clear metrics for identifying and weighing different priorities of individuals and societies. 24 Chapter 3 examines the many different cost and benefit metrics that are used for this purpose along 25 with ethical frameworks that are essential to any full assessment. 26

Chapter 4 continues that analysis by focusing on the concept of “sustainable development,” a 27 concept whose varied definitions and practices reflect the many distinct efforts by societies and the 28 international community to manage tradeoffs and synergies involved with economic growth, 29 protection of the environment, justice and other goals. 30

Second, chapters 5-6 put the sources of emissions and the scale of the mitigation challenge into 31 perspective. 32

Chapter 5 evaluates the factors that determine patterns of anthropogenic emissions of gases that 33 affect climate. While there are many such pollutants, the analysis in chapter 5 focuses where the 34 data are most robust—emissions of CO2 from the energy system—and explores the relative (and 35 interdependent) roles of factors such as population, consumption, and the intensity with which 36 energy is used in various economies. It finds that economic growth, which is closely related to the 37 consumption of goods and services, is the single largest driver of emissions. It also shows that 38 international trade is having a growing impact on exactly where on Earth emissions are released. 39 Chapter 6 looks at the suite of computer models that simulate how these underlying driving forces 40 may change over time. Those models make it possible to project future emission levels and assess 41 the certainty of those projections; they also allow evaluation of whether and how changes in 42 technology, economy, behavior and other factors could lower emissions as needed to meet policy 43 goals. 44

Third, chapters 7-11 look in detail at the five sectors of economic activity that are responsible for 45 nearly all emissions. Those include energy systems (chapter 7), such as the systems that extract 46 primary energy and convert it into useful forms such as electricity and refined petroleum products. 47



While energy systems are ultimately responsible for the largest share of anthropogenic emissions of 1 climate gases, most of those emissions ultimately come from other sectors such as transportation 2 that make final use of energy products. Chapter 8 looks at transportation, including passenger and 3 freight systems. Chapter 9 examines buildings and chapter 10 is devoted to industry. Chapter 11 4 focuses on agriculture, forestry and other land use (AFOLU), the only sector examined in this study 5 for which the majority of emissions are not rooted in the energy system. 6

Looking across chapters 7-11 one major theme that emerges is the concept of co-benefits: the ability 7 to limits emissions of climate-altering pollutants while also yields other important benefits such as 8 reducing erosion caused by deforestation or lowering the harmful health effects of soot when firms 9 switch to less polluting combustion technologies and fuels. These co-benefits often play a large role 10 in evaluating the costs and benefits of mitigation policies. 11

Often, this approach of looking sector-by-sector (and within each sector at individual technologies 12 and practices) is called “bottom up.” That perspective, which is evident in chapters 7-11 13 complements the “top down” perspective of chapters 5-6 in which emissions are analyzed by looking 14 at the whole economy of a nation or the planet. 15

Fourth, chapters 12-16 examine the major issues that arise with mitigation efforts. Chapter 12 looks 16 at spatial planning since many emissions are rooted in how humans live, such as the density of 17 population and the infrastructure of cities. 18

Chapter 13 concentrates on the special issues that arise with international cooperation. Since no 19 nation accounts for more than about [one-fifth] of world emissions and economies are increasingly 20 linked through trade and competition, a large body of research has examined how national policies 21 could be coordinated through international agreements like the UN Framework Convention on 22 Climate Change and other mechanisms for cooperation. Chapter 14 continues that analysis by 23 focusing on regional cooperation and development patterns. 24

Chapter 15 looks at what has been learned within countries about the design and implementation of 25 policies. Nearly every chapter in this study looks at an array of mitigation policies, including policies 26 that work through market forces as well as those that rely on other mechanisms such as direct 27 regulation. Chapter 15 looks across that experience at what has been learned. 28

Chapter 16, finally, looks at issues related to investment and finance. The questions of who pays for 29 mitigation and the mechanisms that can mobilize needed investment capital are rising in 30 prominence in international and national discussions about mitigation. Chapter 16 examines one of 31 the most rapidly growing areas of scholarship and explores the interaction between public 32 institutions such as governments and private firms and individuals that will ultimately make most 33 decisions that affect climate mitigation. Among its themes is the central role that financial risk 34 management plays in determining the level and allocation of investment financing. 35



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